Kit Kat invasion? Nestle Middle East aims to triple sales by 2020
Nestle Middle East expects to triple its sales in the region by 2020 as it expands its factories and develops new brands, according to the company’s top executive.
“By 2020, we want to reach $6 billion (Dh22 billion),” said Yves Manghardt, chairman and chief executive officer of Nestle Middle East.
He added that sales in the region are growing by 15 per cent year on year.
Globally, Nestle’s sales growth slowed to 4.6 per cent in 2013 amid pressure on prices in Europe and weaker emerging market demand. Its net profit dropped to 10 billion Swiss francs (Dh41.3 billion), from 10.6 billion Swiss francs in the previous year.
But in the Middle East, business has been brisk since posting no growth in the UAE, for instance, during the financial crisis.
Operations in the region fetched Nestle $2.4 billion last year.
The Swiss food and beverage company, whose brands include Kit Kat and Gerber baby food, plans to open a second factory in Dubai valued at Dh500 million next year, creating more than 800 jobs.
It will manufacture coffee and culinary products.
It is also expanding its current factory, which acts as the feeder base for its interests in Africa and the rest of the Middle East. Covering an area of 515,000 square foot, the factory manufactures confectionary products.
“We are adding a new line for confectionary,” Manghardt said.
Nestle is looking to open new factories in the region in the long-term. Saudi Arabia is among its major markets, accounting for around 35 per cent of its total sales volume, followed by the UAE, Lebanon, Jordan and Kuwait.
With the loss of its factory in Syria last year and the current unrest in the country, the company lost around $100 million in the last two years.
Meanwhile, the company is looking to launch more premium brands to meet demand from more affluent consumers.
“For this year, we will expand Dolce Gusto. We will be launching it in Saudi Arabia,” Manghardt said.
The coffee machine Nescafe Dolce Gusto was launched in Lebanon last year, he said. Its other premium brands include Perrier water.
Nestle, which set up direct operations in Dubai in 1997, has a portfolio of 16 factories and 13 offices in 13 countries in the region. It has products in several food and beverage categories, including dairy products, frozen foods, coffee, water and confectionary.